Advocacy NGOs (with Elena Serfilippi)
Can NGOs make aid efficient in weak democracies? Traditional arguments state that NGOs can improve governance not only trough the provision of services like health and education, but also as advocates of the poor. It is expected that improvements in governance go against the personal interests of high-handed rulers. Tensions between autocrats and NGOs create a dilemma: if NGOs advocate to improve governance they might not be allowed in the country and thus cannot help. However, if they decide not to meddle in politics, it is likely that the aid they disburse will be captured by corrupt authorities.
Decentralized Aid and Democracy
The provision of foreign aid trough nongovernmental organizations has surged in the last few decades. Using a model of vote over public finances, I show that when private organisations deliver foreign aid, beneficiaries of this aid have incentives to reduce their electoral support for state-led redistribution. As a result, NGOs can crowd out governmental spending, turning private aid into a negative externality for the poor who do not directly benefit from it. The severity of this externality is larger when income distribution is unequal and when political power is skewed in favour of rich citizens. I model NGOs as confronted to a trade-off between saliency of needs addressed and the number of beneficiaries reached. Comparative statics reveal that if projects balance needs and reach, the externality will be larger, hurting the poor the most. Simultaneously, such equilibrated projects maximize aggregate welfare: objectives of fairness and efficiency become incompatible when providing private aid in democracies.
Encouraging Private Ownership of Public Goods: Theory and Evidence from Belgium (with Gani Aldashev, François Libois and Astrid Similon)
We study short-run and long-run effects of a government subsidy to private nonprofit ownership of public good projects. In a simple model, we show that the subsidy increases the prices of project assets in the short run; however, the effect does not persist and prices decline in the long run. This happens because the subsidy temporarily relaxes the resource constraint of non-profit organizations, which allows them to engage in supply-expanding activities. We test this prediction using a unique dataset that we have constructed from Belgian notarial land-transaction records and exploiting a policy reform in public subsidies for land purchases by non-profits aiming at creating privately owned natural reserves. Using the MS-estimation method (Maronna and Yohai, 2000) robust to outliers, we also provide a methodological contribution to the analysis of markets with quasi-donations.
NGOs, the Environment and the Struggle against Cocaine: Case Study of Bolivia
Stylized facts show that policies directed at reducing the production of coca leafs in the early 2000 had ambigous results: on the one hand many producers shifted to profitable non-coca crops, but this did not crowd out coca production. Instead, coca and their supposed substitutes increased simultaneously. I claim taht this effect arises from the type of organizations producing crops alternative to coca, usually cooperatives. Gains in productivity are meet with less hiring because cooperatives redistribute profits. In that sense, gains in productivity in alternatives to coca crowd-out labour, which in turns turns to coca production.